Money News Story

Inflation looking to put 4 million Britons into financial turmoil

According to a study conducted by the Joseph Rowntree Foundation (JRF) approximately 4 million people in the UK are at risk of living below the poverty line due to the increase in inflation.

Economists have predicted that by 2020, there could be a 10% increase to the cost of living. This will put immense pressure on budgets within the home, the impact will be even worse with the freeze on working age benefits and tax credits.

JRF are not very optimistic about the situation, stating that even high levels of employment are unable to rectify the problem considering the fact that there are record numbers of people in low paying jobs.

An estimated 30% of the population are living beneath the nationally recognised minimum income standard (MIS).

The 30% makes up around 19 million of the population, and approximately 8 million out of this number are classified as families who are “just about surviving.” In her Tory leadership speech, Theresa May described this group as people who are not making enough to enjoy a decent standard of living. A decent standard of living means not just having enough for food, clothing and housing but to be active participants in society.

The foundation said that the government should not ignore the other 11 million who are also living below the minimum income standard and are at risk of living in poverty.

Since 2008, the price of a minimum trolley of goods has increased by between 27-30%. The foundation claims that between 2008 and 2012 there has been a rise in poor families.

JRF chief executive Campbell Robb states that the Government should take the required action to assist families in next month’s budget. He suggests that they should increase benefits and tax credits and allow families to keep more of their income.